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Column: Wage theft scourge is a massive bank robbery every day (MA)

By Frank Callahan/Guest Columnist
Posted Feb 23, 2020 at 6:18 PM

The Great Brink’s Robbery, which has been upheld as the most notorious theft in the history of Boston, happened 70 years ago last month.

The brazen daytime heist, in which 11 robbers broke in and stole $2.8 million (about $30 million in 2020 money) from the Brink’s security company in the North End on Jan. 17, 1950, was at the time the largest robbery in U.S. history and dubbed “the crime of the century.” The crime prompted changes to the way companies approached security for both employees and assets. Police, politicians and the public were all focused on making sure lessons were learned and improvements were implemented.

Unfortunately, decision makers today haven’t been acting with the same degree of urgency to an equally onerous theft in our backyard. Wage theft – the practice of stealing money earned by workers – is a $700 million annual problem in Massachusetts. That’s almost $2 million a day being stolen out of the pockets of hardworking men and women, all Massachusetts taxpayers.

It is hurting the workers, who struggle from paycheck to paycheck. It hurts communities, which see its core small businesses suffer because residents have less spending power. And it hurts the entire commonwealth, whose economy suffers, leaving less revenue for crucial services like public safety, education and transportation.

Wage theft may not be as shocking as the Brink’s job, in which gang members picked locks, bound and gagged workers and dispersed into the night. Rather, today’s crooks are more likely to be wearing suits and looking their victims right in the eye while reaching around and picking the wallet from their back pocket. They’re unscrupulous contractors and subcontractors who promise to pay carpenters, pipefitters, sheet metal workers, custodians and countless other laborers agreed-upon wages and then short-change them after the work has already been done.

Frequently, there is little recourse. Maura Healey, the Massachusetts attorney general, has committed to cracking down on wage theft in the commonwealth. It’s not fair to ask Healey and her staff to take on this fight with one hand tied behind their backs.
Thankfully, there is a potential fix. There are two wage theft bills pending before the Legislature on Beacon Hill that would take this scourge head on.

Massachusetts’ Building Trades unions are urging lawmakers to pass legislation to provide Healey with greater enforcement authority. That includes enabling her office to penalize lead contractors for wage theft violations committed by their subcontractors. It would also empower the Attorney General’s office to shut down work sites until the violations are corrected.

And this legislation would pay for itself. More enforcement will lead to more recovery. In Fiscal Year 2019, the AG’s office recovered $5.8 million in restitution for these hardworking men and women – less than 1 percent of what was stolen. It stands to reason that more enforcement will return more money.

There are some champions in the Legislature who have recognized the importance of combating wage theft. Sen. Sal DiDomenico of Everett and Rep. Dan Donohue of Worcester have sponsored bills to battle wage theft and lent their support to ensuring the hardworking people of Massachusetts get paid the money they earn. Both of these bills have more than half of the Legislature signed on as co-sponsors.

Seven decades after the Brink’s robbery, people still recall not only the crime but the response to it to make sure it doesn’t happen again. That’s what we should be doing on the wage theft front, as well.

Frank Callahan is the president of the Massachusetts. Building Trades Council.

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New poll of Maine workers shows strong support for more workforce protections (ME)

Dan Neuman
December 23, 2019

A new survey of workers in Maine shows that there is significant desire for the state to take a major role in adopting policies that improve job quality and advance economic justice.

The survey, which polled private sector workers in Maine, was released last week by the Maine Center for Economic Policy (MECEP) as a part of the organization’s annual “State of Working Maine,” a comprehensive analysis of the economic and workforce trends in the state.

Workers were asked about several workforce policies introduced earlier this year that will likely see a vote sometime next year after state lawmakers return to Augusta in January.

Policies that have seen inaction on the federal level, such as paid family and medical leave, expanded overtime protections, and prohibitions against wage theft and unfair scheduling practices, have strong support among Maine workers. MECEP’s report concludes that this popular support presents an opportunity in the state legislature – where Democrats hold majorities in the Maine House and Senate, as well as control the governor’s office – to make gains after years of conservative control. …

Eighty-six percent want increased penalties for employers who steal wages
MECEP’s survey also shows a substantial amount of support for combating wage theft and mandating predictable work schedules. Eighty-six percent of the respondents want to require employers to pay wages in a timely manner and increase penalties and enforcement for employers who commit wage theft. ….

Senate President Troy Jackson (D-Allagash) has a bill being vetted by lawmakers that would make it easier for the state Attorney General’s office to swiftly clamp down on businesses that may be engaging in wage theft. Another bill that would have mandated that businesses guarantee a fair workweek to their employees was killed in committee after the sponsor, state Rep. Gina Melaragno (D-Auburn), said she needed more time for consultation. That reworked bill has not been submitted for the upcoming legislative session.

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Hennepin County Attorney announces charges of insurance fraud and theft by swindle against former owners of Merit Drywall (MN)

January 21, 2020

Today, the Hennepin County Attorney announced charges of insurance fraud and theft by swindle against the former owners of Merit Drywall. According to the criminal complaint, the two defendants, Leroy and Joyce Mehr, misclassified workers as independent contractors to avoid paying more than $300,000 in workers compensation insurance premiums.

“Wage theft, insurance fraud and worker classification fraud have no place in Minnesota. It is critical that the legal system hold those who are accused of these crimes against construction workers accountable,” said Jessica Looman, Executive Director of the Minnesota Building and Construction Trades Council, an advocate for Minnesota’s union construction industry. “We want to thank the Hennepin County Attorneys office, the Minnesota Department of Commerce Fraud Bureau, and the Building Trades Unions in our state for protecting workers and our industry.”

“The case against the former owners of Merit Drywall shows the strength of the construction community when we stand together and demand action when workers complain of wage theft and worker misclassification,” said Dan McConnell, Business Manager of the Minneapolis Building and Construction Trades Council. “Our members have lost their patience with those developers and general contractors who have profited from schemes like the one alleged here. Together, the Building Trades Unions will do everything we can to continue to assist in ensuring that those who are complicit in the exploitation of workers are held accountable.”

Minnesota’s Building Trades Unions have launched an initiative to combat wage theft, exploitation, and labor trafficking which poses a growing threat to the welfare of immigrant workers and the health of the state’s construction industry. The “Not On My Watch” or “Ya No Mas” campaign enlists union members in efforts to identify cases of abuse, and to assist exploited construction workers on Minnesota jobsites.

The Minnesota and Minneapolis Building and Construction Trades Councils will continue to support efforts to protect all Minnesota construction workers. #notonmywatch.

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Amherst councilors propose bylaws to enforce wage, labor laws (NH)

By SCOTT MERZBACH
Published: 2/25/2020

AMHERST – The Town Council is considering a package of bylaws that would give Amherst officials some oversight in making sure workers are getting minimum wage and that other labor laws are being followed, such as workers being paid appropriately for overtime work and receiving tips.

Collectively known as wage theft bylaws, the proposal is being brought forward by District 1 Councilor Cathy Schoen, District 2 Councilor Pat DeAngelis and At Large Councilor Mandi Jo Hanneke, and would bring Amherst in line with Northampton, Easthampton, Springfield, Cambridge, and other communities that have adopted similar bylaws and ordinances.

The first, known as the responsible employer bylaw, would mandate that the town award contracts only to companies following the laws, Hanneke said. It would require any contractor to certify, in writing, that they are in compliance with wage, hour and benefits laws, and have not had violations for the past five years.

The second, the tax incentive or tax relief bylaw, would mean such agreements, under the purview of the Town Council, can be granted only to businesses that follow the bylaw. The bylaw would also have provisions for rescinding or reducing tax incentives.

The third, the wage and tip bylaw, applies to the service industry and offers the potential for fines or possible license loss if workers are not paid appropriately. The bylaw would also create a Wage Theft Advisory Committee that includes members of the Licensing Commission, Human Rights Commission, Amherst Area Chamber of Commerce and Pioneer Valley Workers Center. In addition, the bylaw would require the posting of rights in all establishments and information on how to report a violation or file a complaint.

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New Jersey DOL cites, fines Katerra sub for wage violations (NJ)

AUTHOR: Kim Slowey
PUBLISHED: Feb. 18, 2020

Dive Brief:

  • The New Jersey Department of Labor & Workforce Development (NJDOL) has issued a stop-work order to subcontractor REB Construction and Maintenance LLC for failure to take the proper deductions from its employees’ pay and for not keeping the required payroll records related to work performed on a project in Jersey City, New Jersey. The department also fined REB $19,250. …
  • The authority that the NJDOL has to stop work on a construction project when significant pay, benefits or other workers’ rights violations are documented is part of new legislation based on the July 2019 recommendations of New Jersey Gov. Phil Murphy’s task force on employee missclassification.

Dive Insight:

Stop-work orders (A5838): The NJDOL can force an employer to stop work if it determines that the employer violated state wage, benefit or tax laws.

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U.S. DEPARTMENT OF LABOR AND NEW MEXICO DEPARTMENT OF WORKFORCE SOLUTIONS PARTNER TO PROTECT THE STATE’S WORKFORCE AND ENFORCE WAGE LAWS (NM)

Agency: Wage and Hour Division
Date: February 11, 2020
Release Number: 20-21-DAL

ALBUQUERQUE, NM – The U.S. Department of Labor and the New Mexico Department of Workforce Solutions have signed a Memorandum of Understanding (MOU) to expand and improve the protection of New Mexico’s workforce, strengthen enforcement of wage laws and level the playing field for responsible employers.

The MOU will allow both organizations to work together to protect employee rights, defend law-abiding employers against unfair competition and maximize taxpayer resources.

“This agreement will help us better protect New Mexico’s workers and help the state’s employers understand wage laws and avoid costly non-compliance,” said Wage and Hour Division District Director Evelyn Sanchez in Albuquerque, New Mexico. “Working together, we can more effectively identify those employers that deliberately attempt to unfairly gain a competitive advantage over those that comply with the law.”

The agreement will help both agencies communicate and cooperate more effectively and efficiently in areas of common interest, including cross training staff and providing employers and employees with information about the law. By doing so, the two organizations seek to protect the wages, safety and health of America’s workforce.

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Column: Wage theft is prevalent, cheats workers in Ohio (OH)

January 31, 2020

Too many bosses in the Columbus area and throughout Ohio are finding ways to cheat their hard-working employees. It’s called wage theft. These unethical employers steal money from workers and make it harder for law-abiding employers to compete.

Here are some of their methods: paying less than the minimum wage; not paying overtime; violating prevailing wage laws on public construction projects; confiscating tips from restaurant wait staff; misclassifying regular employees as self-employed independent contractors; forcing employees to work off-the-clock before and after their regular shifts; and denying workers legal meal breaks. The list of unscrupulous practices is almost endless. …

Mayor Andrew J. Ginther and the Columbus City Council have recognized the problem here. They are considering legislation aimed at curbing wage theft by any developer who receives a tax abatement or other tax incentive. If enacted, this legislation would be a good first step in combating abuses. Four years ago, Cincinnati enacted a similar ordinance. Franklin County suburbs should follow suit.

Central Ohio’s overall economy is healthy and growing. However, not everyone is benefiting. Too many folks are being left behind, forced to work two or three jobs to make ends meet. Dishonest wage-theft violators know this. They prey on the most vulnerable of our fellow citizens.

These crooked employers should be held accountable. Our elected officials and business leaders should tell repeat offenders either comply with the law or get out of central Ohio. We don’t need you and your abusive practices.

Mark Fluharty is executive director of the Central Ohio Labor Council of the AFL-CIO.

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Union volunteers help enforce laws against construction wage theft on Multnomah County projects (OR)

Feb 18, 2020
By Don McIntosh

In the fight against wage theft, the volunteer cavalry has begun to arrive. On Jan. 21, the Multnomah County Commission heard a first report back about a pilot program in which union and community volunteers help County officials police construction work sites to make sure public works contractors are obeying labor laws, such as paying prevailing wage and overtime, not exceeding the mandated apprentice-to-journeyman ratio, and not misclassifying construction workers into lower-paid job classifications.

There are 13 volunteers so far, mostly business representatives from local building trades unions. … Volunteers also get ID badges authorizing them to visit construction work sites, where they speak with workers about conditions-to make sure they match up with what their employers are reporting. Any violations are reported to the Oregon Bureau of Labor and Industries for enforcement.

“Access to the workers is the biggest thing,” said Sheet Metal Workers Local 16 organizer Brian Noble. “They usually don’t know that the company could be stealing money from them. By talking to them, we can find out.”

The first batch of volunteers was trained last August. So far the program includes volunteers from the Sheet Metal, Painters, Carpenters, Operators, Ironworkers, Glaziers, and Bricklayers unions. The software launched Oct. 1. Site visits began later that month. The program is modeled on a similar program used by the Los Angeles Unified School District. …

County commissioners last May approved temporary funding for the pilot program. After hearing the Jan. 21 progress report, commissioners voiced support for making the program ongoing when County Chair Deb Kafoury submits her next proposed budget in April. …

Commissioner Lori Stegman said she’d like to see the program go statewide.
“The term ‘wage theft’ doesn’t really cover it. This is exploitation,” added Commissioner Susheela Jayapal.

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OAG Brings Criminal Charges Against Company, Owner for Wage Violations (PA)

By Christopher D. Carusone, Steven M. Williams and
Carl L. Engel | January 14, 2020 at 12:50 PM

Employers in Pennsylvania should stay on their toes as the Pennsylvania attorney general (AG) announced charges against a major mechanical contractor engaged in numerous public works projects for crimes arising from a prevailing wage dispute. This marks the first time that the attorney general has brought criminal charges for prevailing wage violations, which was previously enforced only through civil actions. …

Although the new crime called “prevailing wage theft” has not been created in Pennsylvania, the attorney general charges that Good and Goodco violated existing criminal statutes prohibiting deceptive or fraudulent business practices, theft by unlawful taking, theft by deception and other related crimes. While the Office of the Attorney General (OAG) historically has enforced prevailing wage laws through civil action, the charges against Goodco mark the first time that the OAG has sought to enforce them with criminal penalties. Cases of this nature are being prioritized by the OAG’s recently formed fair labor section. When Shapiro ran for AG in 2016, he pledged to create a unit that would “enforce Pennsylvania’s labor laws in partnership with the Department of Labor & Industry and the Pennsylvania Human Relations Commission,” among other pro-worker actions. Accordingly, the fair labor section has made a mission of fighting wage theft, tip stealing, worker misclassification and workplace discrimination.

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Report: Construction Workers Frequently Denied Compensation Coverage (TN)

Labor brokers are putting workers at risk to avoid paying insurance premiums

By Alejandro Ramirez
Feb 12, 2020

A new report from the Tennessee Bureau of Workers’ Compensation Compliance Program highlights how construction companies and subcontractors are misclassifying workers to avoid paying workers’ compensation. The report details several other practices rampant in the construction industry that deny protections to workers and give noncompliant businesses a financial edge when it comes to securing contracts.

These practices put workers at risk. If workers are injured on the job, for instance, there’s a chance their employers won’t compensate them because they’re listed as independent contractors rather than as employees. Noncompliance also costs the state tax dollars, though the amount of dollars owed is difficult to pin down, especially when employers try to hide information from assessors.

“It’s sort of like an iceberg,” says Amanda Terry, the bureau’s director of compliance. “What we believe that we’re seeing is only 10 percent – the part that’s above the surface.”

The state collects 4.4 percent on workers’ compensation premiums, and the report says that in 2016, insurance carriers may have lost as much as $296 million.

The report says many employers also hire workers through subcontractors known as labor brokers, which frequently misclassify employees. Contractors hire these brokers, who in turn provide workers for a construction site. Many of these brokers have also been accused of wage theft and other compliance issues.

“We find that … when an employer is doing the wrong thing with their workers’ comp, they’re generally doing the wrong thing across the board,” says Terry.

These practices give labor brokers an unfair advantage. Victor White, director at Mid-South Carpenters Regional Council, a union representing carpenters, tells the Scene that a law-abiding contractor “walks in the door at a 20 percent disadvantage” compared to noncompliant businesses when it comes to bidding on contracts.

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